Sign In

Or Sign In With

Create an account

or

** All fields required

Please leave all of these values empty to help us distinguish humans from robots.

Personal EmailPersonal Phone

Business EmailBusiness Phone

Yes, I would like to receive emails and other electronic communications from Century 21 Canada Limited, doing business as CENTURY 21, about products, services, events and other exciting and educational updates in the real estate industry. You can withdraw your consent at any time. If you have questions, you can contact us at 700 - 1199 West Pender St., Vancouver, B.C., V6E 2R1, or at corporate@century21.ca. We will treat the information you provide in accordance with our Privacy Policy.

Reset Your Password

The Devil's in the sub-areas: Vancouver Real Estate sales stats to June 30 2010

Hi Everyone,

Another month has passed and the market has changed dramatically since my last installment. In the latest iteration of The Real Estate Board of Greater Vancouver's stats package REBGV Stats Package_June2010.pdf it would appear that all is pretty much well in the Vancouver real estate market. while that may be the case from a macro perspective, one must look more closely at activity in the sub-area(s) in which one's property resides.

According to the REBGV President:

"Activity is steady to start the summer season".

“Activity in June marked a healthy balance between the near record setting pace of June 2009 and the considerably slower activity witnessed in June 2008, a period of recession as we all know.”

“There has been less upward pressure on prices in our market the last few months, which has allowed prices to easeback from the record high numbers seen in April.”

“We didn’t experience any record-breaking activity in June, but we did see a stable summer market,” Moldowan said. “The number of new listings coming on the market is not as dramatic as we saw over the previous three months and demand remains at a healthy level for this traditionally quieter time of year.”

The article goes on to say:

"Sales of apartment properties reached 1,258 in June 2010, a decline of 29.7 per cent compared to the 1,790 sales in June 2009 and an increase of 19 per cent compared to the 1,057 sales in June 2008.The benchmark price of an apartment property increased 9.7 per cent from June 2009 to $391,528."

Plus 19% from 2008 same period??? The problem with these broad-based stats are that they don't take into account the dramatic differences between sales rates in different sub-areas, nor do they address the very different factors driving the sales.

With 39 months of inventory (at current sales rates) bad news is on the horizon for sellers who completed purchases of new construction in the past 2 years and are trying to cash out without a loss. It's not going to happen and there will be losses, significant losses.

Inventory and Sales for all of Downtown Vancouver (2010 sales vs 2009 and 2008)

2009 sales for the same period = 339We have gone from 339 sales in 30 days in 2009 to 129 in 2010 for a decrease of 62%

2008 sales for the same period = 195 We have gone from 195 sales in 30 days in 2008 to 129 in 2010 for a decrease of 48%

Different drivers for different sub-areas

When you look at the broad sales stats for Vancouver as a whole, you'll see an approx decrease in sales of 30% from 2009 to 2010. However, if you look at actual numbers for a specific sub-area you often see a very different situation - a decrease of up to 80% in the case of Coal Harbour. How can this be? The answer lays in the drivers. Coal Harbour is largely driven by the international business community whereas many outlying areas are not. Internationally-driven areas are more influenced by global economics and in this arena, buyers are reading negative news almost daily. Take this article from Bloomberg Business Week. It predicts a crash. Will it happen? Probably not, but the uncertainty is sidelining buyers and the doom and gloom is taking its toll.

What to do?

That depends whether you're buying or selling. If you are a seller and aren't motivated to sell, get out of the market until you are. Real Estate values depend on scarcity. Countless overpriced properties listed by sellers who, "aren't in any rush to sell" do nothing but bring prices down. Good for buyers, bad for sellers. If you're a buyer, good for you, there are deals to be had as the truly-motivated sellers become more motivated and prices back off.

In any case, you should employ the services of an area expert whether buying or selling.

Century 21 Canada Limited Partnership currently has franchise opportunities available in select markets across Canada. The intent of this communication is for informational purposes only and is not intended to be a solicitation to anyone under contract with another real estate brokerage organization. CENTURY 21® is a registered trademark owned by Century 21 Real Estate LLC, used under license. ® Trademarks of AIR MILES International Trading B.V. Used under license by LoyaltyOne, Inc. and Century 21 Canada Limited Partnership.

Certain listing content on this website has been provided by The Canadian Real Estate Association. The compilation of such Listing Content is owned by The Canadian Real Estate Association and/or its member Boards and Associations and licensed to Century 21 Canada Limited Partnership.